Bharat 22 ETF Opens Today: Should you invest?

Under the disinvestment program, government is launching Bharat 22 ETF to raise Rs 8000 crores from public. Bharat 22 ETF offers greater diversity where investment is in major government banks.

Bharat 22 ETF: A Strategic Way to Involve People

Bharat 22 ETF will open today for anchor investors while for non-anchor investors, the stock will open from tomorrow and will end for both on November 17, 2017. The scheme aims to raise Rs 8000 crores under the disinvestment program by the government and wants to involve common citizens by opening it up for investment. The government is also offering 3% discount on investment. Bharat 22 ETF is a diversified portfolio of 22 blue chips that aims to bring broad based ownership pattern in public sector units. ETF offers investment in 6 sectors that include industries, finance, energy, FMCG, utilities and basic materials and offers good investment opportunities.

The advantage of investing in this scheme is that it has the total expense ratio of 1 bps which is the lowest in ETF world adding merit to investment. ETF also differs from CPSE which is also a similar case of investment released in 2014. CPSE includes mostly PSU from energy sector while ETF comprises units mostly from banking and finance sector including FMCG.

Why should you invest in Bharat 22 ETF?

Experts opine that investing in Bharat 22 ETF is a good step as it is promising good ROI. As you invest, you get relief from entry load by a 3% discount. This investment can be considered for long run of 5-10 years. Some of the 22 stocks listed under ETF are ITC, SBI, Power Grid Corporation, Axis Bank, NTPC, ONGC, Bank of Baroda, Indian Oil limited, Coal India, Nalco and many more. The highest share in this is hold by ITC of 15.2%.

Anuradha Thakur, Joint secretary of Department of Investment and Public Asset Management said that this disinvestment program now forms the basic strategy of the government which is aimed to release Rs 72, 000 crore this year. Investing under this can prove to be beneficial for the investors in the long run.